July 31, 2012

Informant in FCPA Sting Case Sentenced to 18 Months in Prison

The key informant in a failed high-profile foreign bribery case in Washington will serve 18 months in federal prison as a judge here flatly rejected the Justice Department's position that probation was appropriate punishment.

Prosecutors had urged U.S. District Judge Richard Leon to sentence the cooperator, Richard Bistrong, a former top official at Armor Holdings, Inc., to probation for his extensive assistance in providing details of illegal schemes in the military and law enforcement equipment industry.

Bistrong was charged with a conspiracy count for corruptly assisting Armor in obtaining contracts. Leon noted that prosecutors could have charged Bistrong with other crimes, the penalties for which could have put him in prison for many more years. Bistrong pleaded guilty two years ago, setting up what would become a closely watched sentencing hearing.

Leon said today in court that Bistrong's substantial assistance in building a novel case against 22 executives and employees in the military products arena warranted leniency. A sentence of probation, however, does not reflect the seriousness of the crime, Leon said. Prison is the ultimate deterrent to reduce the potential that other people will commit similar crimes, the judge said.

"I have to be concerned about others," Leon said in court, addressing Bistrong at the end of an hour-long hearing. "They need to understand, they need to be concerned, that if they're caught, even if they cooperate, they're going to prison."
DOJ trial attorney Joey Lipton and a lawyer for Bistrong, Brady Toensing, argued unsuccessfully that a sentence of probation would send an appropriate message. Leon said at one point that the government, in its recommendation for probation, was "asking for the moon."

Lipton said Bistrong provided "invaluable insight" to the government before and during a lengthy undercover investigation. Toensing, of Washington's diGenova & Toensing, said cooperators play a pivotal role in the enforcement of the Foreign Corrupt Practices Act.

Prosecutors charged 22 people in Jan. 2010 in Washington's federal trial court with participating in a conspiracy to bribe officials from the African nation of Gabon in a fake $15 million deal for law enforcement equipment.

Bistrong participated in hundreds of recorded meetings, including one at a restaurant in Georgetown in Northwest Washington. Investigators recorded thousands of phone calls during the sting. Toensing said Bistrong risked his safety and personal relationships.

Those recordings were central in the prosecution of the sting case, which was the largest-ever Foreign Corrupt Practice Act case against individuals. During one trial, Bistrong testified for 13 days, enduring vigorous cross-examination.

DOJ officials touted the prosecution as a novel use of sting techniques applied in the white-collar arena. But, after two trials that didn't land a single conviction, the government earlier this year abandoned the cases. DOJ also allowed three defendants to back out of guilty pleas.

Defense lawyers representing individuals in the case portrayed Bistrong as a rogue quasi-government official, effectively calling the shots for FBI agents and prosecutors. Several defense lawyers, including Michael Madigan and Charles Leeeper, and a group of former defendants, attended today's sentencing hearing.

"As my life unraveled around me five years ago, your honor, I decided to take responsibility for what I did regardless of the consequences," Bistrong said in court today.

Bistrong blamed his own selfishness for hurting loved ones and ruining his life. "Whatever your honor decides today, it will not mark a new chapter in my life but the final one in a sad and ugly book that will finally be closed," Bistrong said, choking up.

In addition to prison, Leon today sentenced Bistrong to three years of supervised released. Bistrong was allowed to surrender to federal prison officials on his own.